Text 6861, 107 rader
Skriven 2004-12-30 21:27:00 av Jeff Binkley (1:226/600)
Ärende: Fact and Comment
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http://www.forbes.com/forbes/2005/0110/023.html?_requestid=1586

Fact and Comment Steve Forbes, 01.10.05, 12:00 AM ET How Good a Year? 

How prosperous a year we have will depend heavily on how well and how 
quickly Alan Greenspan quashes the inflation he inadvertently reignited 
in late 2003. Raising interest rates alone won't do the job. In the 
1970s rates rose to catastrophic levels-and so did inflation. To affect 
a cure the Fed must reduce the excess monetary liquidity in the 
marketplace. It has a time-tested way to do this through its open market 
operations-sell bonds from its portfolio, which will soak up excess cash 
used to pay for those bonds. Until gold drops below $400 an ounce, 
inflation will continue to lurk, and we'll be subject to more disruptive 
price eruptions, ā la oil and steel. The U.S. economy should grow around 
4%, but the longer the Fed dithers, the slower the economy will grow in 
the second half and the tougher it will be for all of us in 2006. 

In the meantime Congress would do the economy a world of good if it made 
permanent the 2003 tax cuts and immediately-and forever-abolished the 
death tax. It would also be wise to enact major tort reform. And at some 
point Congress will have to clean up the antigrowth messes in the 
Sarbanes-Oxley Act that are disproportionately damaging small and medium-
size companies. 

How committed is the Administration to fundamentally overhauling the 
federal income tax code and Social Security? Caution will be urged-why 
rock the boat? Why upset powerful interest groups, such as AARP? The 
President and his colleagues will have to exert persuasive advocacy, but 
the job can be accomplished more easily than Beltway pooh-bahs realize. 

The tax code is a horrific mess. Most people require professional help 
in filling out their income tax returns. The booklet with instructions 
for the "simplified" 1040EZ form runs 36 pages. 

Most people also realize Social Security rests on a shaky fiscal 
foundation. Personal accounts, contrary to what demagogues and Democrats 
declare, are not equivalent to putting your nest egg into prebubble high-
tech highfliers. The money could go entirely into riskless fixed-income 
instruments, such as U.S. Treasurys or well-diversified, balanced mutual 
funds. Workers could choose whether they want to risk staying with the 
old system or going with the new. 

The White House should realize that any overhaul of the tax code or 
Social Security will arouse intense opposition, so it might as well go 
for the big reforms. That lesson should've been learned two years ago 
when Republicans tried to abolish personal taxes on dividends. The 
effective tax rate was eventually cut by almost two-thirds, but they 
would have gotten nothing had they not initially asked for a 100% cut. 
The operating political principle in Washington: Ask for a lot, and ye 
shall receive more than if ye had asked for a little. 

If the Fed gets its act together, Japan's economy should rev up again as 
oil prices and shipping rates fall. Europe will no longer be able to 
blame the dollar for its anemia; pressures will again build inside 
France and Germany for the kind of systemic structural changes that 
Ireland and Britain underwent in the 1980s and that most central eastern 
European countries are undergoing today. 

China's challenges will grow as its economy expands, particularly in 
regard to developing an environment in which entrepreneurs can flourish 
without landing in the crosshairs of local party apparatchiks. The big 
geopolitical issue of the year will be Iran more than Iraq. The mullahs 
are determined to get the bomb. How-and if-we stop them will be a 
critical battle in our war against Islamic totalitarian fanaticism. 

New York No Longer Appropriate for UN 

It won't happen, but the U.S. should advocate relocating UN headquarters 
out of New York City. Where? A lot of cities would qualify, all having 
the common denominator of being in troubled, poor countries. The poverty 
and backwardness of Port-au-Prince, Haiti or Lagos, Nigeria or Dar es 
Salaam, Tanzania or Addis Ababa, Ethiopia would serve as daily reminders 
to UN diplomats of one of the reasons their organization was created-and 
in ways that New York never can. In Manhattan UN diplomats and 
bureaucrats inhabit a privileged, pampered, junket-oriented bubble, a 
contributing factor to the UN's years-long record of murderous failure 
and moral turpitude. No surprise that the UN is now trying to expand its 
NYC operations. 

The oil-for-food scandal, perhaps the biggest instance of corruption in 
history, allowed Saddam Hussein to siphon off tens of billions of 
dollars and direct it (after meeting his own needs) to favored 
countries, companies and individuals whose influence could help 
perpetuate his deadly dictatorship. 

The UN has long turned a blind eye to terrorism. It failed, miserably, 
to stop the 1994 genocide in Rwanda-militants of the dominant Hutu tribe 
literally hacked to death 800,000 members of the minority Tutsi tribe. 
On the eve of this mass murder, Kofi Annan, then head of UN peacekeeping 
efforts, pulled out half the UN's forces, thereby giving a tacit green 
light to the slaughter that followed. 

The UN's utter lack of principles is on constant display in the UN Human 
Rights Commission: One of its members is Sudan, whose Arab-dominated 
government is committing genocide against the black population in the 
Darfur region. Another outrage was the UN's recent attempt to influence 
our presidential election. A top UN bureaucrat manufactured the way-
overhyped story about an alleged missing weapons cache in Iraq. The 
timing of this was no coincidence-it was payback for President Bush's 
violating UN sensibilities with regard to Iraq. 

UN failings are not new. Repotting it might not enable the UN to regain 
its moral bearings, but it's certainly worth a try.


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